Senate Votes Energy Bill, 94 to 4, Without Allowing Arctic Drilling

By CLIFFORD KRAUSS,

Published: February 20, 1992

Correction Appended

WASHINGTON, Feb. 19—
After it jettisoned a plan to drill for oil in the Arctic wildlife region, the Senate overwhelmingly passed an energy bill today intended to encourage the development of alternative-fuel vehicles and ease Federal regulations on nuclear generators and other forms of electrical power.

The highly technical legislation was sewn together by liberals who sought to conserve energy, and conservatives who hoped to stimulate more energy production. As a patchwork of proposals and amendments, it did not wholly satisfy most senators nor the White House, although it was approved by a vote of 94 to 4.

Secretary of Energy James D. Watkins endorsed the Senate action. "We're very pleased," he said in a brief interview after the vote. "It's a tremendous win for the consumer, the producer, the economy and jobs."

A similar energy bill is currently in committee in the House. It encourages conservation and efficiency among electric utilities and deregulates much of the production and transmission industry. Currently, however, the measure does not contain provisions like the Senate bill that would ease licensing requirements for the nuclear industry. The House bill is expected to reach the floor by the Easter recess.

The Senate energy bill was seen as a harbinger for important changes in the automobile industry, and as a promoter of solar power and other technologies. It would give modest aid to the faltering nuclear and natural gas industries by easing the licensing regulations for atomic power plants and natural gas pipelines. By setting new efficiency standards for electrical appliances and buildings, it will also affect most consumers, especially those who now have to install improved insulation in their new homes to qualify for Federally insured mortgages.

The measure is similar in a few respects to the National Energy Strategy proposed by President Bush at the time of the Persian Gulf war, which also called for increased exploitation of nuclear power and coal. But the Senate killed the centerpiece of the White House bill, which would have permitted oil drilling in the Arctic National Wildlife Refuge, a calving ground for 180,000 Alaskan caribou.

The Senate bill also includes moratoriums on oil drilling off most of the shores of New England, New Jersey, Washington state and Oregon, in contrast to the Administration proposals to accelerate oil drilling in the oceans.

The Administration, in coalition with conservative lawmakers and representatives of automobile-producing states, did succeed in holding off proposals to increase fuel-efficiency standards for cars. They argued that the auto industry could not afford to make the fuel economy adjustments while it was reeling from the recession.

Senator J. Bennett Johnston, Democrat of Louisiana and primary sponsor of the legislation, argued on the Senate floor that its partial deregulation of the electrical utility industry would "dramatically help every consumer by reducing rates considerably" while its encouragement of natural gas production would "improve the environment measurably."

Senator James M. Jeffords, Republican of Vermont, criticized the legislation for failing to establish a large market for domestically produced alternative fuels like methanol as he proposed in an amendment that was tabled by a vote of 57 to 39. "The bill falls short because we still will become increasingly dependent on oil from the Middle East," he said in an interview. "We still don't have a national energy strategy."

Mr. Jeffords decided in the final hours to vote in favor of the bill, but he said he had done so reluctantly.

With oil prices low and supplies plentiful, the legislation has received little attention outside competing environmental groups and utility associations, which lobbied hard on various provisions. President Bush reserved a single line of his State of the Union address to the energy issue, a far cry from the days when long lines at the gas pumps inspired President Carter to call the creation of an energy policy his highest domestic priority.

The most far-reaching provision of the bill strengthens the 1990 Clean Air Act by obliging most commercial and Government vehicle fleets to begin replacing their stock of light trucks and cars in 1995 with vehicles that run on natural gas, solar power cells, ethanol and electricity. Ninety percent of the non-military fleets purchased by Federal agencies would be required to use alternative fuels by the year 2000.

Another measure would ease regulations in the Public Utility Holding Company Act of 1935 to allow independent, unregulated power companies to provide power across state lines. The intention is to ease entry of new power producers into the market. Energy Producers 'Overjoyed'

Daniel Becker, a lawyer for the Sierra Club, disagreed, saying that by generating more electricity, the provision would mean "burning more fossil fuels and causing more pollution."

Environmentalists also expressed concern with a measure that would streamline licensing procedures for new nuclear power plants. It would replace the current system by which the Nuclear Regulatory Commission separately licenses construction and then operation of plants with a single review procedure. Proponents of the measure said it could reduce regulatory delays by up to 10 years.

"Its going to be a great help assuming it goes all the way through the House," said Scott Peters, spokesman for the U.S. Council for Energy Awareness, a nuclear power lobbying group. "It will give the utilities the possibility to consider nuclear power. Very few utilities would undertake building a nuclear power plant under the licensing procedures of today."

An amendment offered by Senator Timothy E. Wirth, Democrat of Colorado, would set higher efficiency standards for light bulbs and electric motors in an effort to eliminate the need for an estimated 23 large power plants in the next several years. He estimated his provision would save the economy $2 billion a year.

The House's bill is currently under consideration in the Energy and Commerce Committee.

Chart: "Provisions of the Senate Energy Bill" Alternative fuels: Starting in 1995, most government and commercial vehicle fleets would be obliged to begin replacing cars and trucks with vehicles that run on alternative fuels like electricity, solar power cells and natural gas. This provision is meant to create a market for nonpolluting cars and trucks and encourage automobile makers to build more of them. Nuclear energy: Nuclear Regulatory Commission procedures for licensing nuclear power plants would be streamlined -- a single review would replace separate licensing procedures for construction and then operation. Proponents say this could reduce regulatory delays for starting some plants by up to 10 years. Electrical energy: A 1935 law restricting independent utilities from carrying electricity across state lines would be repealed. By opening wholesale power generation to more competition, proponents say it will force utilities to buy electricity from more efficient producers. Natural gas: Regulations governing interstate natural gas pipelines would be streamlined to expedite construction. American gas producers would receive preferential treatment in rate competitition with Canadian producers. Energy efficiency: Manufacturers would have to make more efficient light bulbs, electric motors, air conditioners and commercial heating equipment. The bill sets minimum energy standards designed to save $2 billion in yearly energy costs.

Correction: February 21, 1992, Friday A table in Business Day yesterday summarizing the provisions of the energy bill passed by the Senate on Wednesday included one provision erroneously. The measure giving American gas producers preferential treatment in rate competition with Canadian producers was stricken from the bill before passage.